In the past several months, the stock market has suffered significant setbacks, the financial sector has been forced to write-off millions of dollars in defaulted loans, the unemployment rate has increased, and job creation overall has slumped.
In Fall 2007, employers said that they expected to hire 16 percent more new graduates in 2008 than they did in 2007—this on top of several years of significant growth in the job market. Now, they say there is a somewhat diminished market for this year’s college graduates: they forecast hiring half that—8 percent—more graduates from this year’s class compared with actual number of hires from the class of 2007.
While this may sound like bad news for the Class of 2008, the long-term prospects for today’s college graduates are considerable. The fact that only a limited number of employers are halting their college recruiting efforts in the face of such negative economic news is testimony to the economy’s need to maintain the development of the professional employment pipeline. The demographic trends are well understood by employers and suggest that any retrenchment in the college recruiting market is likely to be short and shallow.
The drop off in hiring is being driven by the same factors that are affecting the overall economy: the slumping housing and financial markets. Although expectations are positive in every sector outside of construction and finance, the deleterious effects of the collapse of the housing and finance sectors are being felt in other portions of the economy.
Still, the negative impact on the job market for new college graduates won’t be long-term.
“The reason is demographics more than anything else,” explains Ed Koc, NACE’s director of strategic and foundation research “The demographics say there are going to be openings in the college job market for years to come. The aging of the work force is a primary reason as the number of retiring Baby Boomers who need to be replaced grows. New college graduates are the main replacements for these retirees.”
Many of this year’s graduating seniors have already received offers, and there is very little evidence that those offers are being rescinded. Nevertheless, graduates who enter the job market late in the recruiting season are likely to find fewer competitors for their services than originally anticipated. Similarly, graduates who had their eyes set on particular industries, such as finance and construction, may need to adjust their target industries.
Overall, 44 percent of employers said they changed their hiring plans as a response to economic conditions, while 48 percent reported no change. Of those firms that reported changes to their hiring plans, a majority said they were increasing their recruiting while just under half said they would hire fewer new graduates
Overall, on-campus recruiting continues to look relatively strong. Two-thirds of employers plan to be on campus hiring for both full-time and internship positions. Long-term, employers are increasing their recruiting in the fall with decreased activity in the spring. Hiring plans for Fall 2008 suggest that employers will be looking to hire the same number or more graduates next fall than they did this past fall.